Class Voting by Shareholders

The video tutorial explains the creation of multiple stock classes with varying voting powers. It covers common stock with one vote per share and special classes with enhanced voting rights. The concept of magnifying voting power by creating stock classes with multiple votes per share is discussed. Additionally, the tutorial highlights the creation of preferred stock, which offers preferential treatment in liquidation and other benefits to enhance shareholder value and liquidity.

What is a common characteristic of common stock in terms of voting rights?

• One vote per share

• Ten votes per share

• No voting rights

• Double voting rights

How can a company increase the voting power of a stockholder without issuing more stock?

• By eliminating voting rights

• By reducing the number of shares

• By creating a new class of stock with more votes per share

• By issuing more shares of the same class

What is a key feature of preferred stock?

• It has no voting rights

• It offers preferential treatment in liquidation

• It is always more expensive

• It cannot be sold on the public market

Which type of stock is commonly used in startups for preferential treatment?

• Voting stock

• Non-voting stock

• Preferred stock

• Common stock

What benefit does preferred stock provide to its holders?

• No financial benefits

• Enhanced liquidity and value

• Guaranteed dividends

• Increased voting power